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Virtually no change in getting woman on boards in Canada, stats show

The number of Canadian women serving on corporate boards has inched up a mere one percentage point in the year since securities regulators first began ordering companies to track and disclose women in their ranks.

Of 677 companies listed on the TSX and analyzed by provincial regulators, based on corporate year-end reports, women made up 12 per cent of all board seats, up from 11 per cent a year ago.

Fifty-five per cent of the companies had at least one female director, up 6 per cent from last year.

But that means 45 per cent did not have a single woman.

And, of 521 board seats that became open this year, only 76 were filled by women.

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“That means eighty-five per cent of the time the seat was filled by a man,” said Ontario Securities Commission CEO Maureen Jensen during an address to the Toronto Region Board of Trade on Tuesday.

“Without an improvement here, we will never reach 30-per-cent female board representation,” she said. Although the OSC did not set any specific benchmark, some lobby groups have set an informal target, and it was this that Jensen was referring to.

Sarah Kaplan, director of the Institute for Gender and the Economy at the Rotman School of Management, argued the results show there’s been almost no change in getting women on boards in Canada.

“I think it’s basically the same number.

“One per cent is not movement,” she said.

“If we only made one per cent with incredible press and attention, it feels like we will never make progress.”

Kaplan concedes that there is no easy fix, but added “it’s not enough to say we want this and it will magically happen.”

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Increasingly, she believes that without quotas or penalties, “we are not going to move the needle.”

If there’s a cost to a company’s reputation, not necessarily a fine, where the corporation is called out in a public statement for not having a woman on its board, it might bring change, she said.

Some shareholders have called for more aggressive action beyond the OSC’s “comply-or-explain” model, where companies must disclose female representation in the board room and in the executive offices.

Ontario Teachers’ Pension Plan has previously called for a minimum of three women on every board by 2020 or face delisting from the stock exchange.

Other jurisdictions have adopted aggressive rules. Norway mandated that all boards must be 40 per cent women, or face stiff penalties including forced dissolution. In France, any company with more than 500 employees or €50 million in revenue must have at least 40 per cent women directors by 2017.

Kaplan added that, while there are reasons why people oppose quotas, saying it can make women feel like token choices, she believes it results in a wider recruitment strategy.

“It forces you to search more broadly. It’s not to take lower quality people,” she argued.

“Typically in a board search, people go to their networks. If you have a board filled with white men over a certain age, then you end up settling on someone who looks like just yourself,” she said.

Matt Fullbrook, manager of the Clarkson Centre for Business Ethics and Board Effectiveness at the University of Toronto, believes there may be a greater willingness to consider quotas now.

“Up until very recently, a lot of women were against the idea of quotas,” he said. “They were reluctant to be appointed as a token. I think that sentiment is starting to change.

“Just because it’s a quota doesn’t make you a token,” he said. “Quotas are the tools to push it beyond an incremental amount.”

Andrew MacDougall, partner at Osler law firm, who co-authored a report on diversity among publicly listed companies, believes companies should look at their own needs, not face externally imposed quotas.

However, MacDougall noted many companies choose not to set targets of their own. “I call that a big disappointment. If you don’t set a target, if you don’t have a goal, how are you going to reach it?”

He noted that 46 per cent of companies have all-male boards. “It’s surprising in this day and age that there should be such a large number of issuers without a woman on their board.”

What other countries are doing

Norway: This Nordic country was the first country in Europe to mandate that corporate boards must be at least 40 per cent female or face stiff penalties and risk dissolution, beginning in 2008. The requirement forced companies to go beyond their traditional networks for directors.

France: In 2011, France required any listed and non-listed French companies with more than 500 employees or €50 million in revenue to have at least 40 per cent women directors by 2017. As of 2015, women had 33.5 per cent of French board seats.

United States: U.S. public companies are only required to disclose whether or how they take diversity into account in the makeup of their boards. A government report noted that women make up about 16 per cent of board seats, and, even if men and women joined in equal numbers, it would take four decades to reach parity.

United Kingdom: In 2011, the United Kingdom adopted its form of comply-or-explain. As of October 2015, women held 26.1 per cent of FTSE 100 board seats, up from 12.5 per cent in 2011, meeting a 25 per cent target. A new report has suggested it be raised to 33 per cent by 2020.

Australia: Companies must either adopt a diversity policy or explain why they have not done so, and disclose data. In 2015, women held 22 per cent of all board seats in ASX 200 companies, compared with 18 per cent in 2013.

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